It is a bit odd coming in to see Hard Commodity prices under the pump (including a $2 drop in Iron ore prices, new cycle lows for Copper and Oil off another buck) but the AUD at the top of the G10 FX leader board. We can I suppose point to a further recovery in global equity prices off the knee jerk moves lower on Monday morning, and a related fall-back in market volatility levels (the VIX is back from 20 to 18). That doesn’t really cut it though (and markets went ‘risk-off’ in the last hour of New York trading – to no ill effect on the AUD). Yet it was also notable to see the AUD bouncing on yesterday’s RBA minutes, that contained absolutely nothing new relative to the post-meeting RBA statement or subsequent Statement on Monetary policy. The price action does speak to a market that is very short AUD and has a lot of bad news baked into the current price.
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